TAX ALERT 3, FINANCE BILL, 2021
21 June 2021
May 12, 2021 Minister Tusabe Richard (Minister of State in charge of National Treasury) told parliamentarians that the budget for fiscal year 2021/22 will reflect medium term fiscal path which allows for an increased spending to reach medium term goals as embodied in the National Strategy for Transformation (NST1) while maintaining public debt at sustainable levels. The total resources projected for the fiscal year 2021/22 is Frw 3,806.9 billion, made up of domestic resources amounting to Frw 2,543.3 billion (comprising of Frw 1,717.2 billion from tax revenue) and Frw 1,263.7 billion from external resources. On the expenditure side, key priorities will include access to quality health, increasing agriculture and livestock productivity, scaling up social protection coverage, improving the quality of education, and supporting businesses (through the economic recovery fund and the manufacturing, build to recover program) to invest for recovery.
In addition to existing tax provisions, taxation will focus on newly introduced provisions, including the Electronic Invoicing System (EBM for all), transfer pricing regulations, allowance of VAT inputs and new investment incentives provided by the new investment code.
Please refer to the attached for our analysis of the new areas of focus.